COVID-19 International Developments: Daily Scan, April 15, 2020
Prerna Gandhi, Associate Fellow, VIF
Strategic
Putin seizes crude supply deal to oil relations with Trump

The Russian president and his US counterpart have held five conversations since March 30, more than in the whole of 2019, as they negotiated the largest ever co-ordinated cut in crude oil production in response to a collapse in demand caused by the coronavirus pandemic. While Russia was likely regardless to have had to cut production because of the collapse in global demand, the agreement has offered large diplomatic benefits for Russia. Kremlin officials have however, cautioned against a short-term breakthrough, but Russia’s deputy foreign minister this weekend proposed talks with the US over co-operation in space, and Moscow is pushing for an extension of New Start, a bilateral deal capping the number of nuclear warheads held by each country that expires next February. “Trump has this idea in his head that getting along with Russia can pay off,” Andrew Weiss, former Russia director on the US National Security Council said.

US-Saudi ties strained as Mohammed bin Salman reverses on oil

The Saudi Crown Prince may have squandered his political capital with United States by flooding a saturated oil market with discounted crude at a time when fuel consumption was plummeting. It helped trigger the biggest stock market sell-offs since the financial crisis of 2008 and threatened the collapse of America’s highly leveraged oil industry. For some hubristic reason, Riyadh seems to have thought Washington would blame Moscow for the price war. However, Republicans in both the House of Representatives and the Senate, who have acted as a shield for Saudi Arabia against congressional attempts to punish it for its ruinous war in Yemen or brutality towards dissidents, have now threatened reprisals. Led by lawmakers from oil states such as Texas and North Dakota, the erstwhile Saudi allies have called for the withdrawal of US troops and Patriot air-defence batteries from the kingdom.

ASEAN Plus Three countries pledge to jointly fight COVID-19, keep markets open

The Association of Southeast Asian Nations, China, Japan and South Korea (ASEAN Plus Three or APT) on April 14 pledged to enhance cooperation in jointly fighting the COVID-19 pandemic and stabilizing and invigorating the regional economy. In a joint statement of the special ASEAN Plus Three meeting on COVID-19, the 13 Asian countries agreed to pool more efforts to guarantee the health and safety of people and keep markets open and free in the region. In the joint statement, the countries considered setting up an APT reserve of essential medical supplies that enables rapid response to emergency needs, encourage tapping on existing regional emergency reserve facilities including the warehouses managed by the ASEAN Coordinating Centre for Humanitarian Assistance on disaster management (AHA Centre), among others, and further consider the utilisation of the ASEAN Plus Three Emergency Rice Reserve (APTERR). They also reaffirmed commitment to the readiness of the Chiang Mai Initiative Multilateralisation (CMIM), the Regional Financial Arrangement (RFA), as a reliable layer of the Global Financial Safety Net.

The pandemic may change Russia's calculus in the Middle East

Over the past two weeks, the spread of COVID-19 in Russia has accelerated. The country currently has more than 18,000 officially registered cases and 148 deaths. Future economic recovery will also likely be inhibited by Russia's inability to borrow abroad due to the Western sanctions. This will affect the country's foreign policy initiatives, and more specifically, its projection of power in the Middle East. Moscow's projection of hard power and the vacuum left by the US in the Middle East have helped it regain some positions in Arab capitals and allowed it to shake off international isolation, but that has not necessarily impressed the Russian citizenry. Polls are consistently showing growing fatigue among the Russian public with the Kremlin's "foreign policy adventures". Likewise, Russia's charm offensive in the Gulf, which was accompanied by high-level visits over the past three years, has seemingly reached its limits. Many of the multibillion-dollar contracts which were promised during official meetings have never materialised.

Amid the global pandemic, North Korea unleashes multiple missile test launches

At a time when the world’s attention is glued to the Covid-19 pandemic, North Korea test-fired its latest barrage of missiles on April 14. The test is believed to have been of short-range, anti-ship missiles, according to South Korea’s Joint Chiefs of Staff, which closely monitor North Korean military activities. The drills continued for about 40 minutes, the JCS said. It was the fifth test this year. Four separate tests of various missile systems were conducted last month. April 14’s test firings may have been statements as they were fired one day before South Korea goes to the polls in legislative elections. April 15 is also the birthday of North Korea’s “eternal president” Kim Il Sung, the late grandfather of Kim Jong Un and the nation’s most revered figure.“You have to test systems that are new to bring them online and certify them as operational,” Dan Pinkston, a Seoul-based expert on strategy at Troy University, told Asia Times. Given the global distraction provided by the on-going pandemic, and the unprecedented response to it in Western Europe and North Korea, the timing for weapons tests may well be ideal.

UN chief: world faces misinformation epidemic about virus

U.N. Secretary-General Antonio Guterres warned on April 14 that the world is facing "a dangerous epidemic of misinformation" about COVID-19 and announced a U.N. campaign to flood the internet with facts and science to counter what he called "a poison" that is putting lives at risk. The U.N. chief decried what he described as a global "misinfo-demic" that is spreading harmful health advice, "snake-oil solutions," falsehoods, and wild conspiracy theories. Guterres urged social media organizations to do more to counter the misinformation and to "root out hate and harmful assertions about COVID-19." "Hatred is going viral, stigmatizing and vilifying people and groups," he said in a video statement. "Mutual respect and upholding human rights must be our compass in navigating this crisis. "The secretary-general saluted "journalists and others fact-checking the mountain of misleading stories and social media posts." He called for trust in science and in institutions "grounded in responsive, responsible, evidence-based governance and leadership."

Obama endorses Biden for president to 'heal' America

Barack Obama endorsed Joe Biden's White House bid on April 14, saying his long time vice president can unify and "heal" a nation struggling through some of its darkest moments. The formal backing by perhaps the most popular politician in America is the latest shot in the arm for Biden's surging candidacy, and a further sign that Democratic leaders are rallying around the party flag bearer ahead of November's election."I believe Joe has all the qualities we need in a president right now," Obama said, calling his choice of Biden as running mate in 2008 "one of the best decisions I ever made." The 77-year-old former vice president and Democratic stalwart is the party's presumptive nominee to challenge Donald Trump, after his lone remaining rival Bernie Sanders dropped out of the race last week. Obama's endorsement comes relatively early in the race compared to 2016. That year he waited until June 8 to endorse Hillary Clinton, who had clinched the Democratic nomination against rival Sanders two days earlier.

Donald Trump halts US contributions to World Health Organisation during ‘review’

“I’m instructing my administration to halt funding of the World Health Organisation while a review is conducted to assess the World Health Organisation’s role in severely mismanaging and covering up the spread of the coronavirus,” Trump said during the daily White House briefing on April 14 on the pandemic. He said he planned a 60- to 90-day evaluation period during which funding would be held. Earlier in the day, seven Republican senators demanded WHO records on communication with Chinese authorities between October 1 and March 12. The letter also requested information about whether the WHO had followed its own epidemic protocols in its handling of the outbreak, the dates of when it first knew about the coronavirus and sent investigators to China, and details about any financial compensation WHO leaders receive outside their regular salaries.

South Korea's ruling Democratic Party expected to win big

Armed with masks and gloves, South Koreans will go to the polls today to elect 300 lawmakers to Parliament amid the coronavirus outbreak. The legislative election, held once every four years, is widely seen as a vote of confidence for President Moon Jae-in, whose five-year term ends in mid-2022. Experts expect the ruling Democratic Party (DP) to extend its lead in Parliament, given that the government's handling of the virus outbreak is viewed positively at home and abroad. South Korea has received international praise for its massive testing capability and other innovative measures such as drive-through testing and high-tech contact tracing. The coronavirus has infected 10,564 people in the country and killed 222. About 2,800 patients are undergoing treatment. Surveys also show that voters consider the pandemic as the biggest factor in their decision. A recent poll showed that 72.6 per cent of respondents rated the government's response to the outbreak as positive.

Turkey’s new amnesty law excludes dissident journalists and politicians

The Turkish parliament ratified a controversial bill on April 13 to fight against overpopulation in prisons amid the coronavirus outbreak. However, the law, prepared by the ruling Justice and Development Party (AKP) and its nationalistic coalition ally MHP, has been criticized for reducing the sentences of tens of thousands of prisoners and releasing mafia leaders, while dissident journalists and human rights activists, lawyers and politicians will remain behind bars. The law will reduce sentences for inmates, except for those jailed on charges related to terrorism, violence against women and children, and sexual abuse. Some inmates over 65 and women with children below the age of six, as well as sick prisoners who cannot take care of themselves, will be subject to home confinement. Up to 100,000 prisoners are expected to be released. Faik Oztrak, spokesperson for the main opposition party, said: “You keep journalists in prisons, you release the thieves. This is clearly political opportunism. Those who accept bribes will be freed; those who report bribery will go to jail.”

France summons Chinese ambassador after coronavirus comments spark outrage

The French foreign ministry said on April 14 it had summoned the Chinese ambassador to protest a string of controversial comments by Beijing’s embassy in Paris on the coronavirus. China’s embassy to France has been leading a high-profile public relations campaign in recent weeks to vaunt the country’s success in largely quelling the coronavirus while criticising the handling of the crisis by Western countries. On April 12, the Chinese embassy published on its website a long text titled “Restoring distorted facts – Observations of a Chinese diplomat posted to Paris”. The diplomat, who was not named in the text, sharply criticised the Western response to the coronavirus outbreak as laggard. But most pointedly, the diplomat accused workers at nursing homes in France of “abandoning their posts overnight … and leaving their residents to die of hunger and disease”. That comment sparked fury across the political spectrum, with people leaping to the defence of nursing home workers.

Economic
World economy to shrink 3% in 2020, worst setback since 1930s: IMF

The global economy is projected to contract by 3.0 percent in 2020 from a year before due to the coronavirus pandemic, suffering the worst setback since the Great Depression in the 1930s, the International Monetary Fund said on April 14. But the global economy could bounce back if the epidemic recedes in the second half of this year, with the IMF projecting 5.8 percent growth next year. The United States will see its economy shrink 5.9 percent in 2020, the worst contraction since 1946, according to the IMF's World Economic Outlook report. The Japanese economy is projected to contract by 5.2 per cent. China is projected to grow at a subdued 1.2 percent in 2020. The Eurozone is projected to log a negative growth of 7.5 percent. For 2021, growth for both the United States and the Eurozone is projected at 4.7 percent, while China is expected to hit 9.2 percent growth and Japan 3.0 per cent.

Only emerging Asia will see growth in grim 2020, IMF says

Amid the troubling year, however, the IMF sees emerging Asia as the one region with a positive growth rate in 2020, at 1%.Other than China, India is seen growing 1.9%, despite the sharp slowdown from last year's 4.2%. In Southeast Asia, Vietnam, the Philippines and Indonesia are expected to stay positive, growing 2.7%, 0.6% and 0.5% respectively. Thailand, meanwhile, is expected to contract by 6.7% and Malaysia's growth is seen to fall to minus 1.7%. The baseline assumption is that the pandemic fades in the second half, allowing for a gradual lifting of containment measures. Asia is also expected to lead the world as it recovers in 2021, with China projected to see a 9.2% expansion, while India will bounce back to 7.4% growth, the report said. The ASEAN-5 -- Indonesia, Malaysia, the Philippines, Thailand and Vietnam -- are predicted to grow 7.8% collectively next year.

Macro-market discrepancy growing amid COVID-19

The divergence between economies and stock markets has become more pronounced as shares around the world have remained resilient despite ever-worsening economic data amid the COVID-19 pandemic. Domestic and Global stock markets have rallied after a crash in late March, as if they were invulnerable to the disease which has dealt a severe blow to overall macroeconomic sectors including the job market and international trade. Analysts mentioned the U.S. Federal Reserve's aggressive liquidity supply, the expectation of economic recovery and hopes for a coronavirus peak in the U.S. as reasons for the global stock market rally."The global stock market rally is quite reasonable," Eugene Investment & Securities analyst Lee Sang-jae said. "The biggest stimulus would be the U.S. Fed's strong determination to dismiss all kinds of fear factors. It is also hard to overlook a possible U.S. economic recovery and the coronavirus peak."However, most analysts say it is too early to anticipate a V-shaped recovery.

Gold rallies to over 7-year peak as virus sparks recession fears

Gold soared nearly 2% to hit its highest since late 2012 on April 14. Gold’s rise came alongside gains in global equities after Chinese trade data came in better than expected and as some countries tried to restart their economies by partly lifting restrictions aimed at containing the pandemic. Global recession forecasts combined with the rapid pace of governmental money-printing is boosting activity in gold, INTL FC Stone analyst Rhona O’Connell said in a note. “There’s a lot of safe-haven buying,” said Bob Haberkorn, senior market strategist at RJO Futures.

China's ability to draw capital called unshaken

Apart from dealing with the availability of upstream and downstream supply chains, some US businesses moving back home also have to face the reality of leaving China's lucrative consumer base to their global competitors, said Chen Wenling, chief economist at the China Centre for International Economic Exchanges. Greg Gilligan, chairman of the American Chamber of Commerce in China, said the chamber's latest surveys showed that China remains a "top long-term priority for most US companies, despite slowing growth, wider US-China tensions, long-standing business challenges in the country and the COVID-19 outbreak". China will speed up the process to shorten negative lists, which identify sectors where foreign participation is restricted, continuously widen the market access to foreign investment and revise the catalogue of industries in which foreign capital is encouraged and increase the number of encouraged items, Ye Wei, deputy director-general of the Ministry of Commerce's Foreign Investment Administration, said last week.

Australia tightens foreign investment rules after market tumble

Australia is adopting an increasingly defensive posture toward Chinese investment after years of embracing massive and steady streams of capital from its largest trading partner. The Australian government is now requiring that all proposed foreign investments are subject to scrutiny by the Foreign Investment Review Board, regardless of their deal value. The length of the reviews has been extended to a maximum of six months, from one month. Although Treasurer Josh Frydenberg denied the move was targeted at one particular country, it is clearly focused on China, which has been pouring money into Australia. Previously, investments from countries with which Australia had free trade agreements, including China, were largely not subject to regulatory screening if the deal was worth less than 275 million Australian dollars ($174 million), even in security-sensitive sectors like defence, transportation and telecommunications.

Scott Morrison urges teachers to open schools amid coronavirus so parents can put 'food on the table'

Prime Minister Scott Morrison has urged teachers not to force parents into a decision between home schooling their children and "putting food on the table" as the country deals with the threat of coronavirus. Mr Morrison made a direct appeal to teachers to reopen schools after the Easter break, saying "the education of our children hangs in the balance". Mr Morrison repeated health advice that the risk of COVID-19 spreading among school-aged children was very low. Federal Education Minister Dan Tehan said there had been "a very consistent message". "There are obviously different approaches within different jurisdictions, and states and territories ultimately have the final decision with what happens with their schools," he said."But the clear message is, for all those parents who are working, and they can't look after their children safely at home, schools are open and your students can attend school. For all those vulnerable children, school's open and you can attend school."

Toyota, Renault and Volkswagen to reopen European plants

Toyota, Renault, Hyundai, Volkswagen and Volvo are among those that have opened or are preparing to restart production at sites closed last month, though others including Jaguar Land Rover have pushed back earlier plans to fire up their factories. Every major European and American site was shuttered last month to protect workers and because of falling demand and problems in the industry’s complex supply chains. Many of the companies saw demand fall as consumers remained indoors across Europe, and had sufficient stock at dealerships to accommodate the trickle of business that remained. Despite a spate of government support schemes paying auto workers during the closures, the virus outbreak has led to a dash for cash across the industry, with Ford and General Motors drawing down credit lines, and Daimler opening a new €12bn facility to shore up its finances.

Medical
China’s initial coronavirus outbreak in Wuhan spread twice as fast as we thought, new study suggests

In late January, researchers from mainland China and Hong Kong, including China CDC chief George Gao, had estimated that a Covid-19 patient could infect an average of 2.2 people, based on studying 425 patients in Wuhan. A more recent estimate of this reproduction number, by Imperial College London last month, found the figure for 11 European countries including Britain to be 3.87 people. But researchers at the Los Alamos National Laboratory in United States have now estimated that those who carried the coronavirus in Wuhan were passing it on to 5.7 people on average. In their study, published last week in the journal Emerging Infectious Diseases, the researchers, led by Steven Sanche and Lin Yen-ting, wrote: “Unavailability of diagnostic reagents early in the outbreak, changes in surveillance intensity and case definitions, and overwhelmed health care systems confound estimates of the growth of the outbreak based on data. ”The US researchers also used mobile phone data to estimate the numbers of daily travellers in and out of Wuhan.

Disposable gloves may feel safe — but don't be deceived

Disposable gloves made of vinyl, latex or nitrile may give a feeling of sterility, but this feeling of safety is very deceptive. Although disposable gloves are worn in doctors' surgeries and by paramedics, they protect the hands only from coarse contamination, such as blood or other bodily fluids. They can protect against contamination with bacteria and viruses only for a very short time. This is because the material of disposable gloves is actually porous, and the longer you wear them, the easier it is for pathogens to penetrate the supposed protective cover. This is one of the reasons why medical personnel carefully clean and disinfect their hands after using disposable gloves. "I would not even recommend the wearing of disposable gloves in everyday life to medically untrained people. It requires a certain amount of know-how and practice to take off disposable gloves in such a way that any microorganisms adhering to them remain on them and glove wearers do not smear them onto their hands, wrists or the sleeves of their outer clothing when taking them off," Prof. Dr. Ojan Assadian, president of the Austrian Society for Hospital Hygiene cautioned.

Why positioning Covid-19 patients on their stomachs can save lives

Doctors are finding that placing the sickest coronavirus patients on their stomachs -- called prone positioning - helps increase the amount of oxygen that's getting to their lungs. Patients with coronavirus often die of ARDS, or acute respiratory distress syndrome. The same syndrome also kills patients who have influenza, pneumonia and other diseases. Seven years ago, French doctors published an article in the New England Journal of Medicine showing that patients with ARDS who were on ventilators had a lower chance of dying if they were placed on their stomachs in the hospital. "We're saving lives with this, one hundred percent," said Narasimhan, the regional director for critical care at Northwell Health, which owns 23 hospitals in New York. The ventilated patients typically stay on their stomachs for about 16 hours a day, going on their backs for the rest of the time so doctors have better access to their front side and can more easily give them the treatments they need.

For Further Reading:
  1. Financial Times: Putin seizes crude supply deal to oil relations with Trump, https://www.ft.com/content/a30d1838-3056-4c5c-b032-2117c2612bbd
  2. Financial Times: US-Saudi ties strained as Mohammed bin Salman reverses on oil, https://www.ft.com/content/abdd2eda-7e49-11ea-8fdb-7ec06edeef84
  3. China Daily: Joint Statement of the Special ASEAN Plus Three (APT) Summit on Coronavirus Disease 2019 (COVID-19), http://www.chinadaily.com.cn/a/202004/15/WS5e95eee9a3105d50a3d16317.html
  4. Al Jazeera: The pandemic may change Russia's calculus in the Middle East, https://www.aljazeera.com/indepth/opinion/pandemic-change-russia-calculus-middle-east-200413135440728.html
  5. Asia Times: Covid-19 provides perfect cover for Kim, https://asiatimes.com/2020/04/covid-19-provides-perfect-cover-for-kim/
  6. Mainichi: UN chief: world faces misinformation epidemic about virus, https://mainichi.jp/english/articles/20200415/p2g/00m/0in/019000c
  7. Japan Today: Obama endorses Biden for president to 'heal' America, https://japantoday.com/category/world/obama-endorses-biden-for-president-to-'heal'-america
  8. SCMP: Donald Trump halts US contributions to World Health Organisation during ‘review’, https://www.scmp.com/news/china/diplomacy/article/3079929/coronavirus-us-senators-demand-who-records-saying-health
  9. Straits Times: South Korea's ruling Democratic Party expected to win big, https://www.straitstimes.com/asia/east-asia/south-koreas-ruling-democratic-party-expected-to-win-big
  10. Arab News: Turkey’s new amnesty law excludes dissident journalists and politicians, https://www.arabnews.com/node/1658956/middle-east
  11. SCMP: France summons Chinese ambassador after coronavirus comments spark outrage, https://www.scmp.com/news/world/europe/article/3079927/france-summons-chinese-ambassador-after-coronavirus-comments
  12. World economy to shrink 3% in 2020, worst setback since 1930s: IMF, https://mainichi.jp/english/articles/20200415/p2g/00m/0bu/002000c
  13. Nikkei Asian Review: Only emerging Asia will see growth in grim 2020, IMF says, https://asia.nikkei.com/Economy/Only-emerging-Asia-will-see-growth-in-grim-2020-IMF-says
  14. Korea Times: Macro-market discrepancy growing amid COVID-19, https://www.koreatimes.co.kr/www/biz/2020/04/175_287874.html
  15. CNBC: Gold rallies to over 7-year peak as virus sparks recession fears, https://www.cnbc.com/2020/04/14/gold-markets-coronavirus-in-focus.html
  16. China Daily: Nation's ability to draw capital called unshaken, http://www.chinadaily.com.cn/a/202004/14/WS5e950b5da3105d50a3d15f02.html
  17. Nikkei Asian Review: Australia tightens foreign investment rules after market tumble, https://asia.nikkei.com/Politics/International-relations/Australia-tightens-foreign-investment-rules-after-market-tumble2
  18. ABC News: Scott Morrison urges teachers to open schools amid coronavirus so parents can put 'food on the table', https://www.abc.net.au/news/2020-04-15/scott-morrison-asks-teachers-to-keep-schools-open-in-coronavirus/12149056
  19. Financial Times: Toyota, Renault and Volkswagen to reopen European plants, https://www.ft.com/content/e522da8c-afde-418c-98e1-e7deb5d8e07d
  20. SCMP: China’s initial coronavirus outbreak in Wuhan spread twice as fast as we thought, new study suggests, https://www.scmp.com/news/china/science/article/3079879/chinas-initial-coronavirus-outbreak-wuhan-spread-twice-fast-we
  21. Deutsche Welle: Disposable gloves may feel safe — but don't be deceived, https://www.dw.com/en/disposable-gloves-may-feel-safe-but-dont-be-deceived/a-53115350
  22. CNN: Why positioning Covid-19 patients on their stomachs can save lives, https://edition.cnn.com/2020/04/14/health/coronavirus-prone-positioning/index.html

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